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MFAA Prosper : Mortgage and Finance Brief 10
Home buyer confidence decreases The Credit Provider is Pepper Finance Corporation Limited ABN 51 094 317 647. Terms, conditions, fees and charges apply and are available on request. All applications are subject to Pepper's normal credit criteria. Full terms and conditions will be included in our loan offer. *Paid defaults of up to $500 are acceptable on both the Pepper Flexi Advantage and Pepper Self-Employed Advantage home loans. In addition, any number of defaults or judgments registered 1 year prior to the home loan application are accepted with the Pepper Flexi Advantage home loan, and any number of defaults or judgments registered 2 years prior to the home loan application are accepted with the Pepper Self-Employed Advantage home loan, irrespective of whether the defaults or judgments are paid or unpaid. PEP13355/SYN Call 1800 PEPPER (1800 737 737) or visit pepperonline.com.au Need to consolidate your client's debts into one manageable monthly repayment, refinance their existing home loan, or secure cash out for renovations or business use? A Pepper home loan can help reduce your clients financial stress and leave more in their pockets each month by refinancing all their existing home loan and other debts into one manageable monthly home loan repayment. No limit on the number of debts that can be consolidated Easy refinance of other lenders home loans, including low doc and non-conforming loans Cash out for stated purposes including business use Minor defaults accepted* Both Pepper 's Flexi Advantage® and Self-Employed Advantage® home loans o er many great features such as: Approved Finance. Easy As. High food bills and rising energy costs have had a marked effect on consumer spending across the country -- and have significantly impacted on home buyer confidence. The latest Bankwest/MFAA Home Finance Index, which surveyed almost 1200 prospective home buyers, discovered that 37.5% of people said they were worse off financially than 12 months ago. In the first survey of the year, 21.6% of respondents said they would be active in the property market in the next 12 months. However, given their financial circumstances, a number have revised their intentions -- with 19.1% now intending to be active. "A rise in basic costs, like energy and food, is having a big impact on the household budget at the moment," says Ian Rakhit, head of specialist banking at Bankwest. "Households are becoming more conservative with their spending and this is flowing through to a more cautious attitude to the housing market, both in terms of whether it's the right time to enter the market and how prices will track." The survey also identified a difference of opinion over the direction of house prices. While 36.6% of people thought prices would be stable over the next 12 months, 28.8% expect higher prices, and 34.9% saw a drop in prices on the horizon. The majority of households also expect interest rates to rise in the next year. "Households are still wary of higher interest rates, despite the fact that they are already doing it tough financially," says Phil Naylor, MFAA CEO. "It appears that people are feeling some financial pain at present but they are also anticipating things might get worse before they get better, and this cycle will need to be broken in order for the housing market to show signs of life." Bankwest's Ian Rakhit says, "If rates remain at current levels over the next quarter, then it will be nearly a year of steady official rates and could somewhat break the cycle. As a result of this, consumers could become more optimistic about home purchases if the flatter rate environment continues." • For more on the prospects for interest rates over the next 12 months, turn to page 20. News
Mortgage and Finance Brief 09
Mortgage and Finance Brief 11